2012: Is it over yet?

According to a year-end report from the American Chemistry
Council (ACC), the global economy is still stumbling three
years after the great recession of 2008. The Euro
area is challenged to move beyond recession conditions.
Chinas thriving economic expansion slowed in 2012 from the
double-digit expansion of earlier years. The
final thought on 2012 economic news can be summarized as
confidence eroding. Global manufacturing entered a soft period
in the 2012 summer; Europe and East Asia were the most
affected regions.

Looking for positive news has been a challenge in
2012

In the US, recovery in the manufacturing industry struggled
against waves of uncertainty, such as the results of the fall
elections, the failing consensus in the US Congress over
raising the debt ceiling, future tax reforms and the looming
fiscal cliff discussion during December.

Uncertainty throughout 2012 has been unhealthy for the US
and global economies. Manufacturing and HPI companies are
fearful of possible government regulations. In response, these
companies cut back business investments and delayed workforce
expansion.

What next?

Global HPI leaders are divided on how to prepare for the
future. As shown in Table 1, the global
chemical industry has collectively made an improvement from
dismal 2009 numbers. But, this recovery will be uneven beyond
2012. According to ACC, global economic condition will be
characterized by a two-speed world: Developed nations (the US,
Canada, Western Europe and Japan) will be further
challenged by debt, adverse demographic factors and tighter
fiscal policies; economic growth will be slow. Conversely,
developing nations (India, Brazil, Eastern/Central Europe,
Russia, China, East Asia, Africa and the Middle East) will
experience more dynamic conditions. All are based on continued
industrialization and consumer-driven economics. The
Asian-Pacific nations, excluding Japan, will experience strong
growth in 2013 and into the future.

Global business of chemistry

According to ACCs findings, the global chemistry
business paralleled other manufacturing sections in 2012.
Growth was stalled in Europe due to continued uncertainty over
debt from several EU member countries and concerns about the
value of the euro. China, likewise, experienced a downturn in
its chemical industry, as Europe is a major customer of
Chinese chemical products and finished goods. The North
American market is expected to be flat in 2013. However, new
shale gas supplies have kept natural gas prices very low in the
US, and this trend is expected to continue. Accordingly,
lower-cost feedstock and fuels (energy) will
support increased chemical/petrochemical production in the US
and Canada. (For more information, visit
www.americanchemistry.com.) HP

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